Revenue sources and financial strategies for the Appalachian Trail Conservancy

Revenue Sources Generation for Appalachian Trail Conservancy

Revenue Structure

Appalachian Trail Conservancy exist not to make money but to fulfill one of the purposes recognized by federal law; charitable, educational and scientific requirements. Under state and federal tax laws, however, as long as the corporation is organized and operated for a recognized nonprofit purpose and has secured the proper tax exemptions, it can take in more money than it spends to conduct its activities. Based on this, revenue is the society's way of paying for the services provided by Appalachian Trail Conservancy. A revenue structure describes the many sources of income a local government receives. The major sources of revenue include taxes, other revenue sources and inter-governmental transfers, which are defined below.

Compulsory Income

The organization's compulsory income sources include cash and non-cash sources got through taxes, license and permits. Since the firm is a corporation of the federal government, local revenue structures are largely determined by state doctrine. While state governments generally aim to provide sufficient autonomy and support to the firm, there are fifty state-local revenue systems that even vary within states (Government Finance Officers Association, 2010). The revenue structure is influenced by the organization's size, geography, land use and coverage of government services. Other local determinants include numerous legal, political and economic influences, including historical precedent, national economic trends, federal mandates, state laws, intergovernmental relations, regional precedent, citizens' preferences and the city administration's preferences.

In order to bolster revenue, there are several other revenue sources, including local option taxes, service charges, and fees levied by the organization with state approval. These additional sources help the organization gain financial stability, broaden the tax base, expand the types of activities taxed and increase their independence from state and federal finances. Taxes are an essential source of revenue for Appalachian Conservancy and it is a lowed to collect taxes including property, sales and income taxes. Taxations and permits issued to hikers are one of the major revenue sources for the organization and the organization is reliant on one tax with only a limited degree of reliance on a second.

Investment Income

This is income from securities and other non-business investments; such as dividends, interest, option premiums, and income from a royalty or annuity. Interest on margin accounts may be used to offset investment income without limitation. Investment income earned by passive activities must be treated separately from other passive income. Expenses incurred to generate investment income can reduce investment income to the extent they exceed 2% of adjusted gross income. By excluding capital gains from the calculation, tax law, in effect, prevents a taxpayer from claiming an ordinary deduction for margin interest incurred to carry an investment that is taxable at the favorable capital gains rate. The firm's net investment income in 2011 stood at approximately $6,514.

Earned Income

Earned income includes any income that a person or company receives for work they have done. Income derived from active participation in a trade or business, including wages, salary, tips, commissions and bonuses (Krane, Rigos, & Hill, 2001). Others include; union strike benefits and long-term disability benefits received prior to minimum retirement age. The bulk of earned income for the organization comes from fees for services rendered and sale of products. In this regard, Appalachian Trail Conservancy charges hiker for the services given. In addition, the Conservancy also receives income from government contracts and fees, and legislated support from taxpayers. The other sources of earned income include sale of goods and services, such as admission tickets.

Contractual Receipts Income

Contract is a form of trading where there is a formal agreement between two parties. It means that each party has agreed to do something and that if either of them fails to do it they are covered both by the terms of the contract and by contract law. There are several contracts initiated by Appalachian Conservancy and earned income is liable for taxations. The firm is currently contracting with the public sector to deliver specific services though pitfalls exist such as the possibility of distractions caused by delivery of public services which may distract the organization from its primary aims or undermine its independence. Besides, there is a danger that contracts are underfunded so that the organization can only provide a substandard service or has to use its own resources. Achieving Full Cost Recovery is essential to long-term sustainability. And for charity trustees it is against the law to use charitable resources to subsidize public services.

The Appalachian Trail Conservancy (ATC) is proud to count corporations such as UPS, L.L. Bean, REI and Harney & Sons Tea as our partners. The organization continues to expand our partnership and cause marketing opportunities for retailers and manufacturers in the outdoor industry and beyond. Based in Harpers Ferry, West Virginia, the ATC is the only organization solely dedicated to protecting and promoting the world's most famous long-distance hiking trail (Bland, 1989). We support four regional offices, multiple field representatives and 31 maintaining clubs, whose countless volunteers work to repair the footpath, install new bridges and improve campsite design.

Corporate partnerships play a critical role in supporting our work and conserving the pristine nature of the 250,000 acres of trail lands in our care. Relationships created through our corporate partnership program permit us to move forward with Benton MacKaye's vision for the A.T. As a place for renewal and an opportunity to promote wilderness. Currently more than four million people hike some part of the Trail each year, and the ATC boasts 40,000 active, affluent and educated members. Intergovernmental transfers are transfers of funds from one level of government to another. This may be to fund general government operations or for specific purposes.

The above incomes are all beneficial to Appalachian Trail Conservancy and the revenues can be used legally for the agency to seek funding from other federal agencies.

Revenue Model Pie-Chart